Financial Statements 2017–18

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2018 and all information contained in these financial statements rests with the management of the Office of the Commissioner of Official Languages (OCOL). These financial statements have been prepared by management using the Government of Canada's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of OCOL’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in OCOL’s Departmental Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout OCOL and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2018 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex in the Departmental Results Report.

The effectiveness and adequacy of OCOL's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of OCOL's operations, and by the Audit and Evaluation Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements for approval to the Commissioner.

The Auditor General of Canada, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of OCOL's financial statements, which does not include an audit opinion on the annual assessment of the effectiveness of OCOL's internal controls over financial reporting.

The original version was signed by:
Raymond Théberge
Commissioner of Official Languages

The original version was signed by:
Éric Trépanier, CPA, CGA
Chief Financial Officer
Assistant Commissioner, Corporate Management

 

Gatineau, Canada
July 30, 2018

Independent Auditor's Report

To the Speaker of the House of Commons and the Speaker of the Senate

Report on the Financial Statements

I have audited the accompanying financial statements of the Office of the Commissioner of Official Languages, which comprise the statement of financial position as at 31 March 2018, and the statement of operations and net financial position, statement of change in net debt and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Office of the Commissioner of Official Languages as at 31 March 2018, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Report on Other Legal and Regulatory Requirements

In my opinion, the transactions of the Office of the Commissioner of Official Languages that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Official Languages Act.

The original version was signed by:
Nathalie Chartrand, CPA, CA
Principal for the Auditor General of Canada

 

30 July 2018
Ottawa, Canada

Financial Statements

Statement of Financial Position As at March 31 (in dollars)

  2018 2017
Liabilities: Accounts payable and accrued liabilities (note 5) 2,445,906 1,832,520
Liabilities: Vacation pay and compensatory leave 915,264 967,491
Liabilities: Employee future benefits (note 6) 313,267 400,652
Total liabilities 3,674,437 3,200,663
Financial assets: Due from the Consolidated Revenue Fund 2,061,605 1,453,993
Financial assets: Accounts receivable and advances (note 7) 406,186 411,362
Total financial assets 2,467,791 1,865,355
Net debt 1,206,646 1,335,308
Non-financial assets: Prepaid expenses 245,173 130,306
Non-financial assets: Tangible capital assets (note 8) 1,805,617 1,997,609
Total non-financial assets 2,050,790 2,127,915
Net financial position 844,144 792,607

Contractual obligations (note 9)

The accompanying notes form an integral part of these financial statements.

The original version was signed by:
Raymond Théberge
Commissioner of Official Languages

The original version was signed by:
Éric Trépanier, CPA, CGA
Chief Financial Officer
Assistant Commissioner, Corporate Management

 

Gatineau, Canada
July 30, 2018

Statement of Operations and Net Financial Position For the Year Ended March 31 (in dollars)

  Planned results (note 2a)
2018
2018 2017
Expenses: Protection of Linguistic Rights 8,468,530 8,781,273 8,831,888
Expenses: Promotion of Linguistic Duality 7,902,302 8,509,556 7,707,860
Expenses: Internal Services 7,489,944 6,825,819 6,951,541
Net cost of operations before government funding 23,860,776 24,116,648 23,491,289
Government funding: Net cash provided by Government of Canada 20,875,137 20,391,353 20,084,380
Government funding: Change in due from Consolidated Revenue Fund (126,674) 607,612 220,012
Government funding: Services provided without charge by other government departments (note 10) 2,920,526 3,169,220 3,116,833
Net cost (revenue) of operations after government funding 191,787 (51,537) 70,064
Net financial position - Beginning of year 632,976 792,607 862,671
Net financial position - End of year 441,189 844,144 792,607

Segmented information (note 11)

The accompanying notes form an integral part of these financial statements.

 

Statement of Change in Net Debt For the Year Ended March 31 (in dollars)

  Planned results (note 2a)
2018
2018 2017
Net cost (revenue) of operations after government funding 191,787 (51,537) 70,064
Change due to tangible capital assets: Acquisition of tangible capital assets (note 8) 30,000 150,920 165,058
Change due to tangible capital assets: Amortization of tangible capital assets (note 8) (322,586) (342,912) (340,318)
Total change due to tangible capital assets (292,586) (191,992) (175,260)
Change due to prepaid expenses - 114,867 21,148
Net decrease in net debt (100,799) (128,662) (84,048)
Net debt - Beginning of year 1,315,155 1,335,308 1,419,356
Net debt - End of year 1,214,356 1,206,646 1,335,308

The accompanying notes form an integral part of these financial statements.

 

Statement of Cash Flows For the Year Ended March 31 (in dollars)

Operating activities 2018 2017
Net cost of operation before government funding 24,116,648 23,491,289
Non-cash items: Amortization of tangible capital assets (note 8) (342,912) (340,318)
Non-cash items: Service provided without charge by other government departments (note 10) (3,169,220) (3,116,833)
Variations in Statement of Financial Position: Decrease in accounts receivable and advances (5,176) (182,753)
Variations in Statement of Financial Position: Increase in prepaid expenses 114,867 21,148
Variations in Statement of Financial Position: Decrease (increase) in accounts payable and accrued liabilities (note 5) (566,365) 17,973
Variations in Statement of Financial Position: Decrease (increase) in vacation pay and compensatory leave 52,227 (116,533)
Variations in Statement of Financial Position: Decrease in employee future benefits 87,385 180,635
Cash used in operating activities 20,287,454 19,954,608
Capital investing activities: Acquisition of tangible capital assets (note 8) 103,899 129,772
Cash used in capital investing activities 103,899 129,772
Net cash provided by Government of Canada 20,391,353 20,084,380

The accompanying notes form an integral part of these financial statements.

 

Notes to the Financial Statements For the Year Ended March 31

1. Authority and objectives

The Parliament of Canada adopted the first Official Languages Act in 1969. This Act provided that English and French would henceforth have “equality of status and equal rights and privileges as to their use in all the institutions of the Parliament and Government of Canada”.

Under the Act, therefore, the Commissioner of Official Languages is required to take every measure within his power to ensure that the three main objectives of the Official Languages Act are met:

  • the equality of the status and use of English and French in Parliament, the Government of Canada, the federal administration and the institutions subject to the Act;
  • the development of official language communities in Canada; and
  • the advancement of the equality of English and French in Canadian society.

The Commissioner of Official Languages is appointed by commission under the Great Seal, after approval by resolution of the House of Commons and the Senate, for a seven-year term. The Commissioner of Official Languages reports directly to Parliament.

The Office of the Commissioner of Official Languages (OCOL), which serves the public from its offices in Gatineau and its five regional offices, supports the Commissioner of Official Languages in fulfilling his mandate.

OCOL has three programs which are described below:

Through the Protection of Linguistic Rights program, OCOL investigates complaints filed by citizens who believe their language rights have not been respected, evaluates compliance with the Official Languages Act by federal institutions and other organizations subject to the Act through performance measurements and audits, and intervenes proactively to prevent non-compliance with the Act. As well, the Commissioner may intervene before the courts in cases that deal with non-compliance with the Act.

Through the Promotion of Linguistic Duality program, OCOL works with parliamentarians, federal institutions and other organizations subject to the Official Languages Act, official language communities and the Canadian public in promoting linguistic duality. OCOL builds links between federal institutions, official language communities and the different levels of government to help them better understand the needs of official language communities, the importance of bilingualism and the value of respecting Canada’s linguistic duality. To fulfill its role in that promotion, OCOL conducts research, studies and public awareness activities and intervenes with senior federal officials so that they instill a change in culture to fully integrate linguistic duality in their organizations.

The Internal Services program involves those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Since legal remedies are set out in the Act, OCOL’s Legal Services are excluded from its Internal Services and are an integral part of the Protection of Language Rights program. As well, given their specific mandate, OCOL’s Communications Services are not included in Internal Services, but rather form part of the Promotion of Linguistic Duality program.

OCOL is named in Schedule I.1 of the Financial Administration Act (FAA) and is funded through annual parliamentary authorities.

2. Summary of significant accounting policies

These financial statements are prepared using the Government of Canada's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

OCOL is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to OCOL do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 4 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” section of the Statement of Operations and Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2017-18 Departmental Plan. The planned results amounts in the “Government funding” section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt were prepared for internal management purposes and have not been previously published.

Liquidity risk is the risk that OCOL will encounter difficulty in meeting its obligations associated with financial liabilities. OCOL’s objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board.

Each year, OCOL presents information on planned expenditures to Parliament through the tabling of Estimates publications. These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures. OCOL exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

Consistent with Section 32 of the Financial Administration Act, OCOL’s policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

OCOL’s risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.

(b) Net cash provided by Government

OCOL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCOL is deposited to the CRF, and all cash disbursements made by OCOL are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

(c) Due from the Consolidated Revenue Fund (CRF)

Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that OCOL is entitled to draw from the CRF without further authorities to discharge its liabilities. This amount is not considered to be a financial instrument.

(d) Expenses

Expenses are recorded on the accrual basis. Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

(e) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. OCOL’s contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. OCOL’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
  2. Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. Due to the size of OCOL, the remaining obligation for employees who did not withdraw benefits is calculated using employee specific information.

(f) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The entity is not exposed to significant credit risk. The entity provides services to other government departments and agencies and to external parties in the normal course of business. Accounts receivable are due on demand. The majority of accounts receivable are due from other Government of Canada departments and agencies where there is minimal potential risk of loss. The maximum exposures the entity has to credit risk equal to the carrying value of its accounts receivable.

(g) Contingent liabilities

Contingent liabilities are potential liabilities, which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(h) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. OCOL does not capitalize intangible assets.

Amortization of capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:

Asset Class Amortization Period
Equipment and material 5 years
Informatics hardware 4 years
Furniture 5 years
Informatics software 3 years
Motor vehicles 7 years
Leasehold improvements Lesser of the remaining term of the lease or the useful life of the improvement
 

(i) Related party transactions

Inter-entity transactions

OCOL is related, in terms of common ownership, to all government departments, agencies, and Crown corporations. OCOL enters into transactions with these entities in the normal course of business, which are measured at the carrying amount, except for the following:

  1. Inter-entity transactions are measured at the exchange amount when undertaken on similar terms and conditions to those adopted if the entities where dealing at arm’s length, or where costs provided are recovered.
  2. Goods or services received without charge between commonly controlled entities, when used in the normal course of the operations and would otherwise have been purchased, are recorded as revenues and expenses at their carrying amount.
Other related party transactions

Related parties also include key management personnel (KMP) having authority and responsibility for planning, directing and controlling the activities of OCOL, as well as their close family members. OCOL has defined its KMP to be the Commissioner, Assistant Commissioners, and General Counsel.

These related party transactions are recorded at the exchange amount.

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect OCOL's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the liability for vacation pay, employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Adoption of new accounting standards

The Public Sector Accounting Board (PSAB) issued five new accounting standards effective for fiscal years beginning on or after 1 April 2017. The new accounting standards are Related Party Disclosures (PS2200), Contingent Assets (PS3320), Assets (PS3210), Contractual Rights (PS3380) and Inter-entity Transactions (PS3420). The adoption of these standards only impacted note disclosure and did not result in any significant changes other than the creation of note 2i) to describe the accounting policy for related party transactions and additional disclosures in the related party transactions note 10.

4. Parliamentary authorities

OCOL receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, OCOL has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year authorities used
(in dollars)
  2018 2017
Net cost of operations before government funding 24,116,648 23,491,289
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 10)
(3,169,220) (3,116,833)
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (note 8)
(342,912) (340,318)
Adjustments for items affecting net cost of operations but not affecting authorities:
Decrease (increase) in vacation pay and compensatory leave
52,227 (116,533)
Adjustments for items affecting net cost of operations but not affecting authorities:
Decrease in employee future benefits
87,385 180,635
Adjustments for items affecting net cost of operations but not affecting authorities:
Refund of prior years' expense
68,395 13,654
Adjustments for items affecting net cost of operations but not affecting authorities:
Other
(30,720) 136,620
Total items affecting net cost of operations but not affecting authorities (3,334,845) (3,242,775)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets (note 8)
150,920 165,058
Adjustments for items not affecting net cost of operations but affecting authorities:
Increase in prepaid expenses
114,867 21,148
Total items not affecting net cost of operations but affecting authorities 265,787 186,206
Current year authorities used 21,047,590 20,434,720
 
(b) Reconciliation of authorities provided and used
(in dollars)
  2018 2017
Authorities provided: Vote 1 – Program expenditures 20,072,432 19,523,297
Authorities provided: Statutory – Contributions to employee benefit plans 2,119,222 2,104,589
Authorities provided: Statutory – Proceeds from the disposal of surplus Crown assets 3,853 608
Total authorities provided 22,195,507 21,628,494
Less: Lapsed: Operating (1,144,064) (1,193,774)
Less: Authorities available for future years (3,853) -
Current year authorities used 21,047,590 20,434,720
 

5. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are measured at cost, the majority of which are due within three months of year-end.

The following table presents details of OCOL's accounts payable and accrued liabilities:

Accounts payable and accrued liabilities (in dollars)
  2018 2017
Other government departments and agencies 332,839 64,922
External parties 889,609 527,274
Total accounts payable 1,222,448 592,196
Accrued liabilities 1,223,458 1,240,324
Total accounts payable and accrued liabilities 2,445,906 1,832,520
 

6. Employee future benefits

(a) Pension benefits

OCOL’s employees participate in the Public Service Pension Plan (the ''Plan''), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and OCOL contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 related to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2017–18 expense amounts to $1,443,190 ($1,466,267 in 2016–17). For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 2016–17) the employee contributions and, for Group 2 members, approximately 1.00 times (1.08 times in 2016–17) the employee contributions.

OCOL’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.

(b) Severance benefits

Severance benefits provided to OCOL's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. As at March 31, 2018, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

Severance benefits (in dollars)
  2018 2017
Accrued benefit obligation - Beginning of year 400,652 581,287
Expense for the year (51,718) 80,688
Benefits paid during the year (35,667) (261,323)
Accrued benefit obligation - End of year 313,267 400,652
 

7. Accounts receivable and advances

The following table presents details of OCOL's accounts receivable and advances balances:

Accounts receivable and advances (in dollars)
  2018 2017
Receivables - Other government departments and agencies 308,504 328,758
Employee advances and overpayments 97,682 82,604
Total accounts receivable and advances 406,186 411,362
 

8. Tangible capital assets

Cost
(in dollars)
  Opening Balance Acquisitions Disposals and Write-Offs Closing Balance
Equipment and material 586,921 19,600 - 606,521
Informatics hardware 656,936 - - 656,936
Furniture 406,169 53,050 - 459,219
Informatics software 250,337 - - 250,337
Motor vehicles 30,630 30,557 (30,630) 30,557
Leasehold improvements 1,804,423 47,713 - 1,852,136
Total Cost 3,735,416 150,920 (30,630) 3,855,706
Accumulated Amortization
(in dollars)
  Opening Balance Amortization Disposals and Write-Offs Closing Balance
Equipment and material 366,587 73,232 - 439,819
Informatics hardware 479,388 70,416 - 549,804
Furniture 267,305 70,316 - 337,621
Informatics software 245,942 4,395 - 250,337
Motor vehicles 30,630 364 (30,630) 364
Leasehold improvements 347,955 124,189 - 472,144
Total Accumulated Amortization 1,737,807 342,912 (30,630) 2,050,089
Net Book Value
(in dollars)
  Opening Balance Closing Balance
Equipment and material 220,334 166,702
Informatics hardware 177,548 107,132
Furniture 138,864 121,598
Informatics software 4,395 -
Motor vehicles - 30,193
Leasehold improvements 1,456,468 1,379,992
Total Net Book Value 1,997,609 1,805,617

The "acquisitions of tangible capital assets” and the “decrease (increase) in accounts payables and accrued liabilities” presented in the Statement of Cash Flows includes an amount of $35,286 in relation to the acquisition of tangible capital assets, as the amounts relate to capital investing activities in 2016-17 that were to be paid in 2017-18 and excludes an amount of $82,307 as the amounts relate to capital investing activities in 2017-18 that remain to be paid as at March 31, 2018.

9. Contractual obligations

The nature of OCOL’s activities may result in some large multi-year contracts and obligations whereby OCOL will be obligated to make future payments when the services/goods are received. Significant contractual obligations, all related to operating leases, that can be reasonably estimated are summarized as follows:

Contractual obligations (in dollars)
  2018-19 2019-20 2020-21 2021-22 2022-23
Total contractual obligations 21,472 17,738 16,361 8,660 8,660
 

10. Related party transactions

(a) Common services provided without charge by other government departments

During the year, OCOL received services without charge from certain common services organizations, related to accommodation, the employer’s contribution to the health and dental insurance plans, payroll services and audit services. These services provided without charge have been recorded in OCOL’s Statement of Operations and Net Financial Position as follows:

Common services provided without charge by other government departments (in dollars)
  2018 2017
Accommodation 1,693,384 1,671,920
Employer's contribution to the health and dental insurance plans 1,352,594 1,321,779
Audit services 106,000 106,000
Payroll services 17,242 17,134
Total 3,169,220 3,116,833
 

(b) Other transactions with related parties

OCOL incurred expenses from transactions in the normal course of business with other government departments, agencies and Crown corporations. These expenses exclude common services received without charge, which are already disclosed in section a). Other transactions with related parties are summarized below :

Other transactions with related parties (in dollars)
  2018 2017
Accounts receivable 308,504 328,758
Accounts payable 332,839 64,921
Expenses 3,108,875 3,007,615
Tangible capital assets 87,766 -
 

11. Segmented information

Presentation by segment is based on OCOL's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred for the programs, by major object of expenses. The segment results for the period are as follows:

Segmented information (in dollars)
Operating expenses Protection of Linguistic Rights Promotion of Linguistic Duality Internal Services Total
2018
Total
2017
Salaries and employee benefits 7,216,313 6,235,906 4,633,532 18,085,751 17,334,924
Professional and special services 632,720 816,518 986,314 2,435,552 2,774,319
Accommodation 679,569 587,107 426,708 1,693,384 1,671,920
Transportation and telecommunications 48,342 341,052 196,073 585,467 565,734
Amortization of tangible capital assets 137,614 118,890 86,408 342,912 340,318
Rentals 3,985 30,673 258,156 292,814 269,036
Small equipments, materials and supplies 58,814 130,141 138,599 327,554 261,943
Communications and printing 86 243,558 23,864 267,508 186,564
Repairs, maintenance and others 3,830 5,711 76,165 85,706 86,531
Net cost of operations 8,781,273 8,509,556 6,825,819 24,116,648 23,491,289

12. Comparative information

Certain comparative figures have been reclassified to conform to the current year's presentation.

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting (unaudited); for the year ended March 31, 2018

1. Introduction

This document provides summary information on the measures taken by the Office of the Commissioner of Official Languages (OCOL) to maintain an effective system of internal control over financial reporting (ICFR), including information on internal control management, assessment results and related action plans.

Detailed information on OCOL’s authority, mandate and program activities can be found in the 2017–18 Departmental Results Report and the 2018–19 Departmental Plan.

2. Organisational system of internal control over financial reporting

2.1 Internal control management

OCOL has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An organizational internal control management framework, approved by the Commissioner, is in place and includes:

  • Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
  • Values and ethics;
  • Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
  • Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and organizational senior management and, as applicable, OCOL’s Audit and Evaluation Committee (AEC).

The AEC provides advice to the Commissioner on the adequacy and functioning of OCOL’s risk management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

OCOL relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows.

Common Arrangement
  • Public Services and Procurement Canada (PSPC) centrally administers:
    • the payments of salaries;
    • the procurement of goods and services in accordance with OCOL’s Delegation of Authority; and
    • provides accommodation services;
  • Treasury Board of Canada Secretariat provides information used to calculate various accruals and allowances;
  • Public Service Commission provides OCOL with language evaluation services;
  • The Office of the Auditor General provides audit services; and
  • Shared Services Canada provides information technology infrastructure services to OCOL in the areas of internet connectivity and email security.
Specific Arrangements
  • PSPC provides OCOL with:
    • a financial system platform, the Common Departmental Financial System (CDFS), to capture and report all financial transactions;
    • an employee pay administration service to capture all pay transactions; and
    • translation services;
  • OCOL and the other tenants at 30 Victoria Street, Gatineau, have entered into a Memorandum of Understanding (MOU) for base building security and multi tenants responsibilitiesFootnote 1; and
  • The Canada School of Public Service provides OCOL with some training servicesFootnote 1.

3. Organizational assessment results during fiscal year 2017-18

During 2017-18, OCOL completed design and operational effectiveness testing in various key control areas, including Delegation of financial signing authorities for disbursements, hospitality, events, conferences and travel expenditures. Given other management priorities, the planned reassessment of the financial controls embedded within the salary and pay administration business processes was deferred to the 2018-19 fiscal year.

For the most part, key controls that were tested performed as intended, with remediation required as follows:

  • Clarify and communicate organizational financial management procedures and controls;
  • Improve documentation to ensure the application of various key financial controls is consistent and evidenced; and
  • Maintain strong account verification practices.

Management action plans addressing the recommendations have been developed by the process owners and are actively monitored and reported to senior management.

4. Organizational action plan

4.1 Progress during fiscal year 2017-2018

During 2017-18, OCOL continued to make significant progress in assessing and improving its key controls. The following table summarizes OCOL’s progress based on the plans identified in the previous fiscal year’s annex.

Elements in previous year’s action plan Status
Delegation of financial signing authorities for disbursements Design and operating effectiveness completed and remediation of deficiencies completed.
Hospitality, events and conferences Design and operating effectiveness completed and remediation of deficiencies completed.
Travel expenses Design and operating effectiveness completed and remediation of deficiencies advanced.
Salaries / Pay administration Design and operating effectiveness testing deferred until 2018-19 because of other management priorities.

4.2 Status and action plan for the next fiscal year and subsequent years

Building on progress to date, OCOL is positioned to complete the full assessment of its system of internal control of financial reporting in 2019-20. At that time, OCOL will be applying its rotational ongoing monitoring plan to reassess control performance on a risk basis across all control areas. The status and action plan for the completion of the identified control areas for the next fiscal year and for subsequent years are shown in the following table.

Key control areas Design effectiveness testing and remediation Operational effectiveness testing and remediation Ongoing monitoring rotation
Entity-level controls 2018-19 2019-20 Future years
IT general controls 2018-19 2019-20 Future years
Procure to Pay Complete Complete 2019-20
Payroll Complete Complete 2018-19
Capital Assets Complete Complete 2019-20
Budgeting and Forecasting Complete Complete 2020-21
Financial close and reporting Complete Complete 2020-21
Date modified:
2019-04-02